USD/CHF Extends Downside to 0.8250 Amid US Fiscal Concerns, PMI Data in Focus

USD/CHF Extends Downside to 0.8250 Amid US Fiscal Concerns, PMI Data in Focus

May 23, 2025 – The USD/CHF pair extends its decline to the 0.8250 area in Thursday's early European session, as US fiscal concerns continue to weigh heavily on the US Dollar (USD), boosting demand for the Swiss Franc (CHF), a traditional safe-haven currency.

The Greenback remains under selling pressure amid heightened concerns about the US fiscal situation. US President Donald Trump’s proposed tax and spending plans, which would increase the federal deficit by a staggering $3 trillion to $5 trillion over the next decade, have spooked investors. This has only added to the negative sentiment surrounding the US Dollar, pushing it lower against the Swiss Franc.

On top of these fiscal worries, US Treasury bond auctions have also been disappointing, contributing to the USD’s weakness. Analysts point to a broader trend of declining demand for US assets as concerns about the country's fiscal health grow.

Additionally, a report from the Wall Street Journal revealed that President Trump informed European leaders that Russian President Vladimir Putin has no intention of ending the war in Ukraine, as he believes he is winning. This statement is adding to global geopolitical uncertainty, which typically strengthens the Swiss Franc as a safe-haven currency.

US economic data is also in focus, with traders awaiting the release of S&P Global Purchasing Managers Index (PMI) data for May. Any surprises in these figures could provide further direction for USD/CHF in the near term.